Tuesday, May 24, 2011

Unclear on the Concept:Former Minnesota Governor Pawlenty has joined a large group of others seeking the ’12 Republican Presidential Race. Someone should tell these folks that just because the 2012 election is referred to as the '12 election, doesn't mean there have to be 12 candidates.

Mopping Up: Now that quantitative easing has been a massive success (I'm reading from a Fed press release here) it is time to start sucking all that non-money money out of the system before inflation sets in. But won't draining several trillion dollars from the system be just a tad deflationary? What happens to the stock market, to oil, to gold, corn, Bernanke?

Geography Quiz: Where is the port of Gwadar and why should you be interested? (A) It is on the Indian Ocean in southwest Pakistan. (B) Pakistan is trying to get the Chinese to build a base there for the Chinese Pakistani navy.

Emperor/Clothes:Peter Schiff has just noticed that the IMF isn't so much in the business of helping countries as it is in the business of helping banks loot countries. Took him long enough to finish Naomi’s book.

Whose Pocket? While the media are full of anxious ramblings about the pending sovereign default of the US, we have decided to back five-year Egyptian bonds with the “full faith and credit” of the United States. So if Egypt fails – and it certainly does not look much like a success right now – the US taxpayer will make good their debt. Do y'think that Goldman Sachs will be the ultimate holder of this guaranteed gift?

Two Birds: The Supremes have ordered California to release at least 40,000 prisoners from the states prisons because of overcrowding. Perhaps they will take up more spacious quarters in the states enormous inventory of vacant REO houses.

What If:Summer's coming. What would you do if the A/C had to be replaced? If your child needed serious dental work? If the car breaks down? Could you scrape together even $2,000 in cash in the next 30 days? Nearly half of Americans say they probably could not. Interesting measure of financial security.

Wage-Price Sprial: Those who fear inflation – like some members of the FED board such as Kansas City Federal Reserve President Thomas Hoenig – assume that sooner or later the US worker will demand higher wages. Alas, they live in a fantasy world where the US worker has not been put on a common footing with laborers in China and Bangladesh. Wages have been spiraling down in real terms for decades – and that's deflationary.

Job Fares: While Wall Street is celebrating the return of manufacturing jobs to the Rust Belt, keep in mind that thousands of skilled people who used to make $20 and more and hour are lining up for a handful of $7 an hour jobs. The reason factories are returning is simple – the American worker has learned the essential new job skill – working for less money.

Trojan Horse: Overnight, Belarus devalued its currency by 56%. Those who had savings and assets denominated in the BYR lost half of everything. But those who had debts denominated in BYR suddenly only owe half as much. The Greeks are sick with envy.

Rape: If you haven't figured out that the Dominique Strauss-Kahn plot-line is simply the story of the IMF vs the underdeveloped world writ small, go read this.

The End Is Near:When the state reduces the number of weeks you can draw unemployment benefits, what do you tell your children?

Reality Therapy: We in the USA, Inc. keep being told that raising taxes will doom our civilization (or at least our economy). Taxes in Denmark and Sweden are about double those in USA, Inc. and have been for about 30 years. Yet those overtaxed Danes and Swedes continually beat the USA, Inc. in every measure of personal and social well-being except the number of obscenely rich people, and their economies keep chugging along.

Our Motto

Keep fightin' for freedom and justice, beloveds, but don't you forget to have fun doin' it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin' ass and celebratin' the sheer joy of a good fight, be sure to tell those who come after how much fun it was.